COMOVEMENTS OF ECONOMIC ACTIVITY IN THE POST-COMMUNIST ECONOMIES

Timotej Jagric; Sebastjan Strasek

Authors

Timotej Jagric Uneversity of Maribor
Sebastjan Strasek Uneversity of Maribor

Keywords:

Business cycle, multivariate spectral analysis, Granger causality synchronization.

Abstract

This paper studies the cyclic patterns in transition economies with multivariate spectral analysis. It examines whether the transition in Slovenia and Croatia was marked by a significant shift in aggregate economic activity, which corresponds to the definition of the business cycle, and whether the cycles are synchronized with the cycle of the EU. For Slovenia, we find very close synchronization. The testing for Croatia, however, suggests that there is no typical EU component in its business cycle. To additionally support the results obtained with multivariate spectral analysis, we also employed the Granger causality test. According to lag selection criteria, economic activity in Slovenia lags behind the EU economic activity for 1 month. Granger causality test also supports the results for Croatia. We could not find any significant connection between economic activity in Croatia and the EU.

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